Piper Sandler downgrades Biogen, slashes PT by $177 amid transition challenges

Investing.com -- Piper Sandler downgraded Biogen Inc (NASDAQ: BIIB) from “overweight” to “neutral,” given a challenging transition period for the biotech firm. The brokerage hacked the price target from $315 of $138, expressing concerns over Biogen's near-term revenue mix and the uphill battle in building its Alzheimer’s disease franchise.

Biogen is in a difficult balancing act “with the buildout of its Alzheimer’s disease franchise, an uphill battle in our view, while on the other hand leaning heavily into immunology-focused R&D, giving itself more of a fighting chance at driving longer-term value recovery.”

Biogen’s top-line remains heavily reliant on its multiple sclerosis (MS) portfolio, which accounts for over 60% of 2024 revenue, including royalties from Ocrevus. Piper Sandler flagged several headwinds for MS products, including competition from biosimilars and upcoming loss of exclusivity for key drugs like Tecfidera and Vumerity.

The brokerage also questioned the commercial potential of Biogen’s Alzheimer’s drug Leqembi, despite advancements like a subcutaneous auto-injector and ongoing studies. “We remain cautious on the AD franchise, with key milestones still years away,” the note stated.

While highlighting the potential of Biogen’s immunology pipeline, particularly dapirolizumab pegol for lupus, Piper Sandler noted that pivotal data is unlikely until 2027 or later, leaving a long road to revenue stabilization.

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